Fortum’s position on carbon capture and utilisation (CCU)

As the impacts of climate change are increasingly evident, the world needs to transition to a net-zero economy as soon as possible. This requires a dual focus on both emissions reduction and carbon removals. Capturing carbon dioxide (CO₂) and storing it permanently or utilising it as a raw material in various products has emerged as an important tool in climate change mitigation.

While our own production fleet is already decarbonised to a large extent, decarbonisation of industries is within the core of our strategy. Carbon removal has an important role in meeting the climate ambitions of our industrial customers.

Our position in a nutshell:

• The European Commission’s ambition to develop industrial carbon management (ICM) regulation is welcomed. ICM should contribute to the goals of climate, renewable energy, waste and circular economy policies. To promote carbon removals, an EU-wide legal framework and economic incentives are needed.
• The EU 2040 climate target should include emissions reduction as the first priority, supported by carbon sinks and removals. Distinct targets for emissions reductions and carbon removals should be set to ensure both emissions reductions and removals.
• The utilisation of captured CO₂ (CCU) should be preferred over permanent storage, advocating for the use of CO₂ in producing synthetic fuels, chemicals, polymers, and other materials. This approach supports the circularity of carbon, reducing reliance on virgin fossil sources and improving material independence.
• The CCU industry provides a good opportunity to indirectly electrify several industrial and transport sectors that are currently challenging to electrify directly. This will boost the increase of carbon-free electricity production in the EU.
• CCU from biogenic sources should be preferred. Together with clean hydrogen, captured biogenic CO₂ could enable a new, significant chemical industry and accelerate the hydrogen economy. In addition, CCU from fossil sources provides a decarbonisation option in a couple of hard-to-abate sectors for a certain transition period.
• The EU should prioritise extended financing for CCU through existing funds and the upcoming 2025 multiannual financing framework. To support initial industrial CCU investments, national-level guarantees and risk-sharing instruments are necessary. In the next phase, integrating CCU into the EU Emissions Trading System is crucial in order to have a market-based incentive for its deployment.
• While scaling up the supply of CCU products is important, boosting the demand for CCU products is equally key. To boost the demand, an EU framework that makes circulated carbon a wanted commodity is needed. For this, instruments like public procurement obligations for products using captured CO₂, clean standards for CCU products, and blending mandates for fuels should be considered.